U.S. Indicts 4 In Inquiry In Connecticut

By PAUL ZIELBAUER

Published: October 11, 2000

HARTFORD, Oct. 10—
After a year spent weighing evidence of corrupt investments in pension funds made by Connecticut's former state treasurer, a federal grand jury indicted four people today, including the man who ran unsuccessfully for secretary of the state on Gov. John G. Rowland's Republican Party ticket in 1998.

The 25-count indictment accuses that candidate, Ben F. Andrews Jr., and three others of illegally reaping enormous profits from those investments. The others indicted, on an array of racketeering charges, include two executives in a Boston investment firm and Mr. Andrews's sister-in-law, a former low-level aide to Governor Rowland.

The Securities and Exchange Commission also filed civil fraud charges today against the former state treasurer, Paul J. Silvester, and eight others, including the four people indicted.

The criminal indictments, including counts of bribery, money laundering and witness tampering, represent the first enforcement action the government has taken in the case since Mr. Silvester pleaded guilty to bribery and racketeering charges in September 1999. In his plea, Mr. Silvester, 38, admitted taking bribes in return for investing $527.5 million from the state pension fund in five private investment funds.

The indictments came after more than a year of official silence from federal investigators and Governor Rowland's denials of any suggestion that he or his inner circle knew of Mr. Silvester's schemes. Today, as he had in recent weeks when rumors of possible indictments whipped through the State House, Mr. Rowland indicated that he had nothing to fear from the federal investigation, which officials said was continuing.

''He's not worried about it from a personal point of view,'' Mr. Rowland's press secretary, Dean Pagani, said this afternoon. ''If there was criminal activity on the part of these people, it was as a result of a relationship they had with Paul Silvester, not with the governor or anyone else close to the governor.''

Among those indicted today, the one with the closest ties to Mr. Rowland was Mr. Andrews, a former president of the Connecticut chapter of the N.A.A.C.P. who advised the governor on race issues.

The indictment charged Mr. Andrews with bribery, saying he accepted consulting fees potentially worth more than $1 million from an undisclosed investment firm and then gave part of the payment to Mr. Silvester. In exchange for the fee to Mr. Andrews, the firm got a $100 million investment contract from Mr. Silvester, the indictment said.

Mr. Andrews, 59, of Simsbury, Conn., was also charged with lying to investigators about his role in the kickbacks, and with witness tampering -- trying to influence the testimony investigators heard from others involved in the scheme.

The United States attorney's office also indicted Mr. Andrews's sister-in-law, Lisa A. Thiesfield, a former low-level aide to Mr. Rowland who was also Mr. Silvester's re-election campaign manager in 1998. Ms. Thiesfield, 30, of Hartford, is charged with illegally accepting about $1 million in consulting fees from Triumph Capital Group, a Boston investment firm that was also named in the indictment.

Federal officials said that in exchange for Triumph's payment, which the firm made in addition to giving Ms. Thiesfield $25,000 for her work as Mr. Silvester's campaign manager, the firm received a contract from Mr. Silvester to invest $200 million of the state's $18.5 billion pension fund. Calls made to Ms. Thiesfield's lawyer in Boston were not returned today.

Mr. Pagani, the governor's spokesman, said Mr. Rowland knew nothing about Mr. Silvester's deal-making and the kickbacks the prosecutors say were paid to Mr. Andrews and Ms. Thiesfield.

''They were operating in their own loop and keeping others out of that loop,'' he said. As for Mr. Andrews's being a political running mate of Mr. Rowland's, he added: ''It wasn't a matter of the governor recruiting Ben Andrews,'' Mr. Pagani said. ''Ben came to the governor and said he wanted to do this.''

But in the long list of charges leveled today, the most politically damaging to Connecticut Republicans and Mr. Rowland, who appointed Mr. Silvester treasurer in July 1997, may be those that describe how Mr. Silvester allegedly used the party's coffers to launder a $100,000 illegal contribution from Triumph and two of its top executives into his failed 1998 re-election campaign.

The contribution, according to the indictment, was made with the knowledge of Triumph's chairman, Frederick W. McCarthy, and the firm's lawyer, Charles B. Spadoni, in exchange for the $200 million contract. Mr. McCarthy, 57, and Mr. Spadoni, 52, were each charged today with bribery and mail fraud. The government also charged Mr. Spadoni with obstruction of justice, saying he destroyed computer files containing incriminating evidence.

Neither man returned calls made to Triumph's Boston office, but a statement issued by a spokesman for the firm said it and the two men had not done anything wrong and that ''Triumph acted in a responsible, ethical and legal manner.''

Many Democrats kept silent today, not wanting to appear to gloat at Republican misfortune. Denise L. Nappier, the state's treasurer and a Democrat, issued a statement that carefully avoided commenting on the indictments and assured the public that her office was intent on correcting Mr. Silvester's misdeeds.

In his last three months in office, ending in January 1999, Mr. Silvester invested $1 billion of the pension fund's $18.5 billion in assets. Since his guilty plea more than a year ago, Ms. Nappier has withdrawn more than $564 million from funds to which Mr. Silvester awarded contracts.

At least one prominent Democrat, however, used the political opportunity to hammer Mr. Rowland.

''As the indictments come down, you connect the dots and the picture that emerges sure looks like the governor,'' said Bill Curry, a Democratic candidate for Governor in 1994. ''This was his handpicked Dream Team,'' he said of Mr. Silvester and Mr. Andrews. ''His two main excuses seem to be 'I was asleep at the switch' and 'I'm just a bad judge of character.' ''

But Scott McLean, a professor of political science at Quinnipiac University in Hamden, Conn., said the indictments were unlikely to hurt the governor. ''Rowland has been a master of avoiding the blame for all this,'' he said. ''He's got the ability to bracket Silvester off from himself.''

Connecticut's United States Attorney, Stephen C. Robinson, recused himself from investigating Mr. Andrews, whom he has known for several years, said Delcie Thibault, Mr. Robinson's spokeswoman. In his place, John H. Durham, Mr. Robinson's chief counsel, took charge of the indictments, she said.

Since Mr. Silvester pleaded guilty, his sentencing date has been postponed three times as federal investigators bargain for information against others involved in his crimes. Ms. Thibault said no sentencing date had been made for Mr. Silvester. Arraignments of Mr. Andrews and the three others indicted today also have not been scheduled.